.comment-link {margin-left:.6em;}

Monday, March 13, 2006

Chinese R&D

The Wall Street Journal has an article [$] about R&D in China. Nothing surprising here. More outside companies are shifting toward using China for R&D expansion. P&G started in 1988 with 24 employees studying Chinese consumer laundry habits and oral hygene. Now they have 5 R&D centers with 300 researchers. They're doing innovation that is now exported outside of China.

This matches what I've read elsewhere and seen within operations.

But the most important thing is about how China is dealing with all of this.
Having enlisted foreign investment to transform China into a manufacturing powerhouse over the past few decades, Beijing now is mounting a campaign to strengthen domestic innovation that could help push the country into more advanced niches of the global economy. In his annual report at the National People's Congress in Beijing, which ends tomorrow, Chinese Premier Wen Jiabao said the central government will increase spending on science and technology by nearly 20% this year....

China's State Council, or cabinet, recently said the country would seek to boost R&D investment to 2% of gross domestic product in 2010 and 2.5% by 2020 [vs 1.3% today]. At a news conference Friday, senior officials outlined tax breaks and other tools they plan to use to meet that target. Last year, total R&D spending in China -- not including foreign investment -- reached $29.4 billion, rising steadily from $11.13 billion in 2000, according to the government.
A big obstacle is the weak intellectual property protection within the country. And the US currently spends 2.7% of GDP on R&D, but we all know about 90% of that is total multicultural irrational crap and not real science or engineering (or even useful entertainment to keep scientists and engineers happy and motivated).

China offers students studying abroad incentives including generous research grants and R&D projects if they return to China. WSJ mentions one guy who left the University of Houston to return to Beijing to do research in 1995. Today he's the director of the Institute of Physics at an academy there. Talented returnees can build up their own research lab and do research in one area for 10 years. He said it's hard to find such conditions in the US [in my opinion, the US educational system and university system is totally broken].

What all this means is that the incentives offered to ETLT are probably quite solid. And it also means CXTI probably won't have trouble due to a lack of available work. And it says good things about many of the other Chinese reverse mergers I looked at (with the exception of stuff like Chinese Entertainment that I looked at yesterday).

Comments: Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?